Riceland Foods holds annual meeting

Tuesday

Nov 26, 2013 at 5:30 AM

JONESBORO, Ark. — Riceland Foods’ 2012-13 marketing year was the best year in the history of the farmer-owned cooperative, Danny Kennedy, president and chief executive officer, said at the 93rd annual membership meeting Thursday at Arkansas State University’s Convocation Center.

JONESBORO, Ark. — Riceland Foods’ 2012-13 marketing year was the best year in the history of the farmer-owned cooperative, Danny Kennedy, president and chief executive officer, said at the 93rd annual membership meeting Thursday at Arkansas State University’s Convocation Center.

Kennedy said sales for the 2012-13 marketing year were $1.3 billion, up 13 percent from the previous year. It was the sixth consecutive year Riceland’s sales have exceeded a billion dollars.

Distributions to shareholders were up 24 percent for a total of $837 million for the 2013 marketing year ended July 31 compared to $675 million the previous year. Member equity increased 26 percent to $319 million, he said.

"We had the best overall marketing pool settlements in the history of the company," Kennedy said.

"There has been tremendous change at Riceland. We are working in a totally different manner than we were only 10 years ago," he said. "What changed? Our employees have been willing to challenge themselves and their teams to find a better way to run the operations.

"We have completely redesigned the way we make operating decisions based on costs and efficiencies. We have improved performance since the mid 2000s, and I’m proud that we did it through good ole ingenuity instead of down-sizing.

"We also have changed the way we think about pricing strategy. We’re about trying to create more value for rice. When successful, it helps all rice farmers in our region," he said.

"Our strategy going forward is about adding more value to the rice that our farmers grow," Kennedy said.

As of Aug. 1, a Riceland team has been managing the Riceland Rice retail brand, instead of that work being outsourced. Kennedy says that farmer-members should like changes they’ll see in the future.

He said Riceland is also looking very closely at a number of different options that would allow Riceland to create premium quality, quicker-cooking rice products.

"The question I’m asked most by farmer-members is the long-term outlook for U.S. rice," he said.

"The 2013 Mid-South rice crop is the smallest since I’ve been at Riceland and one of the smallest in many years. It has created a tight situation here in the U.S. However, at the same time, we have a high worldwide stocks position. So we are going to go through an interesting marketing year for the 2013 crop," he said.

Kennedy said, "Mid-South rice farmers have the most modern grain handling and milling infrastructure in the world. We also have tremendous logistical infrastructure with access to the Mississippi and Arkansas Rivers, railroads and Interstate highways.

"You combine that with the most progressive, technology-driven production model in the work, and I’m very bullish on U.S. rice long term."

Rice will continue to be viewed from the basis of other commodities like corn. Significant corn stocks worldwide are pressuring corn prices, and that is expected to continue into the spring, he said.

"Soybeans may be a different story considering the demand equation, primarily as a result of China. If Chinese demand continues, we will continue to see premium prices for U.S. soybeans."

Roger Pohlner, a rice farmer from Fisher, Ark., and chairman of the Riceland board of directors, told members that 2013 will go down as the most significant financial year in the cooperative’s history in part due to the settlement after seven years of litigation resulting from the contamination of commercial rice production with Bayer’s Liberty Link rice.

"The $92 million gross settlement provided an unprecedented improvement in members’ equity," he said. "At the time of the settlement, Bayer already had paid claims to rice growers for their economic loss. The settlement of the Riceland claim represented economic losses on the part of the cooperative itself."

Pohlner said the Riceland board of directors concluded that the settlement was a rare opportunity to improve the balance sheet and allow for debt refinancing, facility improvements and value-adding projects which would contribute to crop settlements for Riceland farmer-members year after year.

Pohlner said Martin Ahrent of Corning retired from the board in May after serving 19 and passed away in June. He said that Ahrent, who was 84, had been a strong supporter of Riceland and its Corning grain drier. Ahrent was honored in 2008 with the USA Rice industry’s Lifetime Achievement Award for nearly 50 years of rice promotion activities through the Arkansas and USA Rice Councils.

Long-time farm writer Curt Hodges of Jonesboro received Riceland’s "Friend of the Farmer Award" which is presented to an individual who has made a lasting contribution to rice farmers. Hodges reported on agriculture, farm and other issues for 43 years at the Jonesboro Sun until his retirement earlier this year.

He previously reported news, weather and sports at KAIT-TV in Jonesboro and did on-air announcing at several radio stations in eastern Arkansas. He is a native of Harrisburg and earned a degree in radio-TV at Arkansas State University.

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